MILAN, Italy (Aug. 2, 2010)—Pirelli Tyre S.p.A., buoyed by record second-quarter earnings, doubled net income in the first six months of fiscal 2010 as sales jumped 21.4 percent to $3.08 billion.
Pirelli attributed the earnings and sales increases to volume growth and an improved price/mix component, which together “more than compensated the rise in the cost of raw materials.”
As a result, Pirelli management is forecasting full-year operating profits should exceed $475 million, or nearly 12.5 percent higher than projected in May. Sales could end the year 15 percent ahead of fiscal 2009, vs. the earlier forecast of 10 percent.
Pirelli said unit shipments grew 18.2 percent during the period while earnings and revenue benefited from a 5.9-percent improvement in the price/mix component. Offsetting the improvement somewhat was the impact of changing exchange rates.
First half net income shot up to $146.4 million, while pre-tax earnings for the period jumped 59.4 percent to $288.2 million, or 9.7 percent of sales.
In the second quarter, tire sales rose 22.9 percent to $1.61 billion and pre-tax operating income jumped 54 percent to $161.5 million, or 10 percent of sales.
Broken down by business unit, Pirelli said the consumer activities recorded 60-percent higher operating income of $204.5 million on 17.8-percent higher sales of $2.14 billion. The firm recorded higher sales in both the OE and replacement channels.
Pirelli's industrial business (commercial vehicle tires and steel cord) reported 41.7-percent higher operating income on 30.3-percent higher sales.